We receive today Doug Young, a journalist for famous newspapers and the famous Reuter news agency, who has had the chance to observe many important events in China firsthand.
Could you introduce yourself?
My name is Doug Young, and I worked for many years as a reporter covering mostly financial topics, before coming to teach at the journalism school at Fudan University in 2011. I teach mostly financial journalism to a wide range of students, including undergraduates and both local and international master’s candidates. I also am still quite involved in actual journalism as a regular contributor of commentaries to a wide range of domestic Chinese and international media, and on my own blog, Young’s China Business Blog.
How was China when you first came?
I first came to China in 1987 when I had recently graduated from college. At that time I taught in Beijing at a school that today is called the China University of Geosciences. As you can probably imagine, the China of that time was very different from the China of today. I lived in a relatively new apartment building, but we didn’t have amenities like hot water, telephone service, or air conditioning. Everything was also much cheaper, as my monthly salary was only 500 yuan, which was already about 5 times that of the average Chinese.
What were the most interesting China-related events you have had the chance to cover as a journalist ?
I was in China during the Tiananmen Square movement, though at that time I was working as a research assistant for a couple of reporters, so didn’t get to do any actual reporting myself. One of my other interesting assignments was during the SARS outbreak of 2003 when I attended the first press conference in Guangzhou after China finally admitted to SARS after months of near silence on the issue. Other than that, my biggest events are mostly business related, such as attending big trade fairs.
3 giants have literally taken over the e-commerce market in China, who do you think is the most susceptible to take over (or has already done so maybe)?
I’m not sure which 3 you’re referring to here. Alibaba is obviously one of them, and I’m guessing JD.com is another. Tencent looks unlikely to get involved directly in e-commerce anymore since it’s put its bets on JD.com. Baidu doesn’t seem to have much going on in e-commerce, and there are a few other names like Amazon that are also trying hard to find an audience. All of these companies are quite large, so I doubt any of them will get taken over. But we could perhaps see them take over some smaller rivals in the next few years. The most likely to do a big acquisition would probably be Baidu, and perhaps one of the more attractive targets might be Vipshop.
In the e-business in China what is the most promising sector, and why?
E-commerce is clearly the biggest sector as it’s got the biggest potential in terms of business volume. Financial services also seem to be another sector with big potential, and one that’s growing quickly. Most of the other sectors, like games, social networking, travel, and even search services, are relatively niche areas that will probably see limited growth potential over the longer term.
China has a very interesting social media landscape, what would you say about the Wechat rise to power?
I’ve always had a lot of respect for Tencent, which created WeChat, as they seem to really understand how to create products that people want and that are easy to use. They’ve also been accused of being something of a copycat, which is true of most Chinese companies at this point. But in the case of WeChat, they really seemed effective at combining elements of Twitter and Facebook into a single product that was customized for use on mobile. So they blended together a lot of existing things into a single product that has become quite popular. They’re in the process of trying to integrate yet more functions, like e-commerce, into the platform, though it remains to be seen how successful those will be. But it was quite successful in its red envelope promotions on WeChat over the Chinese New Year holiday.
What do you think about Weibo current situation?
They certainly seem to be a company that’s past its prime, though its situation also seems to be stabilizing a bit these days. I’m guessing that they will end up like Twitter, and remain a strong number-two to WeChat. But the way things change so rapidly in China, it’s possible someone completely new could emerge in the next year or two and even overtake WeChat. That would leave Weibo as a distant number-three, and in danger of eventually losing its relevance. It could receive an even bigger setback if the real Twitter ever decides to try to come to China.
What would you advise new businesses in China?
Be prepared to attend lots of banquets, to get frustrated by lots of bureaucracy, and for Chinese companies (including your own partners) to try to screw you every step of the way. But seriously, when picking partners, try to go with someone who has a western background, as they tend to behave more professionally. And others have said it’s always good to make sure that your objectives are the same as your partners, otherwise it’s quite easy to run into conflicts down the road.
How do you see e-business in 5 years?
5 years is an eternity on the Chinese Internet, and in the Internet world in general. I do imagine we’ll see a big explosion in online financial services during that time, though there could also be a number of scandals due to the huge potential for fraud. I expect the recent euphoria over e-commerce will probably subside. We should see a lot more functions that are currently mainly used over the Internet migrate to mobile phones, and perhaps we could see some big new innovations if and when mobile phones go through their next big revolution, similar to the way Apple revolutionized the industry with its introduction of touch screen smartphones.
Thanks for your time!
If you want to know more about business and e-commerce in China here are a few links